Legal iGaming Discussion Comes to Chile

Chile has become just the latest country in Latin America in which gaming industry leaders are calling for their government to legalize online gambling. Brick-and-mortar casinos in Chile have been closed since March 18, and industry leaders are now asking officials to regulate legal online gambling to potentially save businesses that will be otherwise financially devastated by the perpetual lockdown. Even still, those asking for reforms do not expect this to be a complete fix.

A gated alleyway looks out onto colorful closed storefronts in Santiago, Chile.

Chile is just the latest country in Latin America to consider changing gaming regulations due to the coronavirus. ©Diego Marín/Unsplash

Tension Rising in Chile As Lockdown Continues

Chile, which had already been experiencing significant civilian unrest in the fall of last year, has been brought once more into the fray as protestors stormed the streets outside Santiago in mid-May. The protests, which began already two months into Chile’s lockdown, were spurred by food shortages plaguing the country.

According to The Santiago Times, coronavirus cases in Chile have soared to 138,846 as of June 8, 2020, with more than 2,200 deaths from the deadly novel respiratory illness. Tragically, the number of illnesses in the country accelerated in May, after the country had already been in lockdown since mid-March.

As in many other countries, lockdowns vary region by region in Chile. As of June 10, however, 50 communes in the country will be under full quarantine, with the possibility of the quarantine being extended still further. According to Health Minister Jaime Mañalich, the regions did not adequately uphold social distancing.

As Lockdowns Continue, The Impact On the Gambling Industry

Around the world, the gambling industry has felt the effects of the coronavirus: from the closures of casinos, betting halls, and bingos to the shuttering of most live sporting events, the fate of IRL betting for 2020 continues to hang in the balance as the history of COVID-19 continues to be written.

In Chile, gaming industry officials are feeling the pain now into the third month of the pandemic and its ensuing lockdown measures. At least one group, Enjoy, one of Chile’s leading casino companies, has come forward with their projected losses for the first quarter of 2020: an estimated total equalling $11,372,000 USD.

In April of this year, Enjoy petitioned Chile’s court for assistance as it found itself approaching bankruptcy. According to Enjoy, the impact was due to the joint forces of the social unrest in the fall of 2019, paired with the coronavirus crisis and ensuing casino closures, which have resulted in this staggering total.

Can iGaming Save Chile’s Casinos?

As lockdowns continues, gaming industry officials and stakeholders in these businesses have now publicly called for Chile’s government to implement online gambling regulations which may offer a hail mary to companies which are on the brink of bankruptcy and closure, with no sign of normalcy on the horizon.

Even still, though, these iGaming advocates acknowledge that this will not mean complete financial salvation for Chile’s casinos. Rather, legal iGaming provided by these casinos could merely offset the losses. As of now, it is expected to take at least a year and up to a year and a half for IRL gambling businesses to operate as before.

What Prevents Casinos From Recouping Sooner

If and when physical casinos and betting locations are allowed to reopen in Chile, it is quite likely that they will be expected to implement rigorous protective measures for their staff and visitors alike. As shown by MGM’s multi-part plan to reopen, this entails a number of regulations, including accepting only a fraction of its normal visitorship.

In addition to having only a small number of normal patrons, casinos will also likely have to enforce social distancing measures in the casinos. MGM, for one example, has approached this by announcing that it will close every other slot machine to ensure safe distances kept — but also, unquestionably, lower profits for the company.

Additionally, in Chile, gaming industry leaders are aware that the skyrocketing unemployment in the country will undoubtedly affect the number of patrons who are even considering gambling, as money and food run scarce in the Latin American country. Still, those pushing for legal iGaming hope that this will not dissuade too many possible clients.

The Road to Regulation

Chile’s national gambling authority, the Superintendencia de Casinos de Juego, or SCJ, holds no illusions about the future of legal iGaming in the country. In order to make a strong pitch for legal online gambling, regulators will need to offer attractive taxation and realistic legislative proposals for the government to bite.

It is not out of the question that additional tax revenue will be attractive to Chile’s government, who is currently seeking multiple measures to bail out the country’s ever-increasing poor. Just last week, Chile’s government introduced a new tax on the country’s wealthy: a single-time, 2.5% tax on the wealthiest citizens to offset COVID-19 costs.

The Promise of Legal Gambling in Latin America

As the coronavirus crisis has continued to ravage the economies of countries around the world, but including in Central and Latin America, Chile is far from the only country in the region with industry leaders pushing for significant re-regulation and legalization as a means of bailing the industry and the country out of the ongoing crisis.

One other country with officials similarly singing the promises of increased legal gambling is Brazil. In the last several months, three different officials in Brazil have proposed visions allowing the country to implement legal casinos, including regionally-specific options, reopening during COVID, and integrated resort-casinos nationwide.

Meanwhile, in Colombia, where legal iGaming has proven to be a massive success, leading national gambling association Fecoljuegos has petitioned the country’s government to legalize live casinos: live-streamed casino games. This is intended to offset the tremendous losses to sportsbooks incurred by the cancellation of live sporting events.

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